Assignment of International Finance

Due date: 11:59 am on The day of the final exam in April-Upload your answer to the Owl.uwo.ca site of the course.

No late submission or hard copy will be accepted.

  1. Use the Option Modeller, and make the following synthetic options.

For your submission, you may attach a screen shot of the result of the option modeller:

1) make a Straddle;

2)make a short Straddle;

3)make a Strangle;

4)make a short Strangle;

5) make a Butterfly; make a short Butterfly;

6)make a Condor; make a short Condor;

  1. Specify the cases where you use each of the above synthetic options.

3. By using the Option Modeller, make a Bull Spread; Make a Bear Spread; and specify the cases where you use each of these spreads. Attach the screen shot of spreads that you have made for the answers.

  1. International Portfolio Diversification:

1)Get the data on the returns of Two Risky Assets of your choice*; 2)Combine them with different weights in a Portfolio of Financial Investment; 3)Get the Best Portfolio of the two risky assets; and 4) Combine the Best 2nd Level Portfolio of Risky Assets, from the process of 3, and the Risk Free Assets, such as Bank Deposits/T-Bills for the choice of Risk Preference of the client. Show the Graph of the Efficient Frontier; Optimal Portfolio of Risky Assets; Capital Market Line.

For your answer, print out the final result of the Shazam program with the “Portfolio” command; and attach/cut-and-paste the result file. In your result file, make sure that you include the print out of the data, the graph showing the Risk Free Rate, Capital Market Line; Optimal Portfolio, etc., and the weights of your two/or more assets for the optimal portfolio.

*Suggestion: The best choice would be one domestic and one international asset(stock).

How to choose a foreign stock?

Buying a foreign stock from an international stock exchange is an arduous process. You can actually buy a claim to the major foreign stocks in the U.S. stock exchanges. ADRs or American Depository Receipts are NeogtiableCertificates(Securities) backed up by Stocks listed in foreign Stock Exchanges; Denominated in USD, and convenient for International Portfolio Diversification without hassles of buying foreign stocks from the foreign/international stock exchanges:

For the Top Chinese Stocks you can buy in U.S., see

For the best Japanese Stocks you can buy in U.S. (Japanese ADRs), see